AUD/USD glided to lows at 0.6078 Monday, its lowest level since late 2008. While kicking off the week under pressure amid coronavirus developments, the US Federal Reserve emergency policy action caused a reasonably strong move to the downside in the USD, bolstering the pair off the 0.61 handle on the H4 timeframe. A break here, nonetheless, has the widely watched key figure 0.60 in sight.
The story on the higher timeframes has weekly support in motion at 0.6101, coupled with channel support, taken from the low 0.6744. On the daily timeframe, weekly support is further reinforced by a 161.8% Fibonacci extension point at 0.6068. Note resistance on the weekly timeframe resides around 0.6359 while on the daily timeframe resistance is seen at 0.6301, nearby a channel support-turned resistance, etched from the low 0.6433.
According to the primary trend, the outlook is not bright for AUD/USD.
However, weekly support at 0.6101/channel support, the round number 0.61 on the H4 timeframe, along with the relative strength index (RSI) testing oversold territory and additional daily support from a 161.8% Fibonacci extension point at 0.6068 provides quite a floor.
Even if we do manage to eke out a move beneath 0.61, the current weekly channel support and daily 161.8% Fibonacci extension level may prove problematic for breakout sellers.
The dilemma, therefore, according to chart studies, is a long at current price is in line with technical structure, though against the predominant downtrend.
Disclaimer: The information contained in this material is intended for general advice only.